It does seem strange that we still talk about this recession in our country. It is as if we are still in the midst of it and it is as if we have been badly hit by the recession as much as other countries. The truth is that we have not been as badly hit as other countries. Moreover, given the latest data on the gross domestic product (an increase of 3.4 per cent in the first quarter of this year compared to the same period last year), we are likely to be the envy of a number of EU member states. And this is one of the paradoxes of this recession. With an economy as open as ours, one would have expected a much worse impact than we have had.
There is another paradox related to this recession. I believe that we still have not yet understood the implications of what has turned out to be the worst international economic recession in eight decades; so much so, that there are still people who expect an upturn similar to those that have been experienced in past recessions. The upturn is turning out to be erratic and not uniform at all. When the world's leading economies were growing at a good pace until 2008, the belief started to creep in that the usual boom-bust cycle was something of the past.
When the world moved into recession, optimists thought that the upturn would reflect the usual boom-bust cycle once more, and one just needed to adopt the usual economic remedies. Unfortunately, the speculators have not allowed governments the time to address the problems of recession and have continued to cause one crisis after another. Now, as things are turning out, we note that this is not the usual upturn after a recession, and so the traditional economic cycle could well have become a thing of the past.
Another puzzling aspect is the fact that there were many who stated that with this recession the period of wild capitalism is dead. There are many who believe that this is a good thing as we need some soberness in financial markets. On the other hand, if we were to ignore for a moment the excesses that badly regulated financial institutions have resorted to in the last 30 years, has there been anything positive about this period of so-called wild capitalism? The answer to this question is a definite yes and this is where another paradox lies.
During the last 30 years, we experienced a relentless and ruthless pursuit of profit, even at the cost of breaking the rules. We have witnessed an inexorable drive towards capitalist globalisation. We have seen a concentration of business power, where global markets are dominated by an ever smaller number of firms. Surely this was not supposed to bring about any benefits to the majority of people, and the risk of market failure was always round the corner. We did have some corporate scandals such as Enron and one could always have supposed that it was a matter of time until this way of doing business would become unsustainable; as in fact happened.
In spite of all this, we have been able to enjoy a lengthy period, where, thanks to intense competition, consumers had access to cheaper and better quality products, thereby leading to an improved standard of living. During this period, there has been a continuous strong flow of foreign direct investment into developing countries, resulting in an improvement in productivity in most economies around the world. Today, there are also less people dying of famine than 30 years ago.
None of these developments could be judged as bad things. The question that needs to be addressed is whether the period we are entering will help to sustain these developments. Will a more regulated financial system, a restructuring of values, a slowdown in the drive towards globalisation bring about a better way of life? The common good was certainly not one of the economic priorities in the last 30 years, yet there has been a general improvement in well-being. Now that the common good is expected to feature more strongly in government agendas, will there continue to be an improvement in the well-being of most people? This is the key paradox of this recession as we turn our back on it.